Google Enterprise chief Girouard heads to startup Upstart.com

David Girouard, who led Google’s (s goog) push into enterprise applications, is leaving the company for a startup called Upstart.com. The move has some questioning just how successful the Internet search giant has been in penetrating the applications market, where Microsoft(s msft) remains the leader.

During his eight years with the company, Girouard helped lead Google’s push to take on Microsoft in desktop applications and email, two areas where Microsoft dominated. While Microsoft remains atop the heap, Google was able to parlay its cloud-based infrastructure to win some share and to compete for some high-profile accounts.

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Its aggressive subscription pricing on Google Apps and Gmail — not to mention the free versions — forced Microsoft to offer cheaper hosted versions of Office, SharePoint, and Exchange email.

For all Google’s effort, the incumbent powers Microsoft Office and Exchange Server still lead the corporate applications and email market. Last fall, market researcher Gartner(s it) estimated that Google Apps for Business represented less than 1 percent of Google’s overall revenue and there is some doubt as to whether the enterprise apps business remains a priority for the company.

Still, market share and revenue may never have been Google’s goal. By offering a lower-cost option to the Office/Exchange tandem, Google forced the market leader to respond, and that may have been the point all along.

The market switch to Google apps is primarily lead by small and medium sized businesses. As those companies grow they aren’t going to be switching to Microsoft unless and until Microsoft has a competitive product in the cloud space for comparable costs. As a small or even medium sized business you would be foolish to invest in the IT infrastructure required to use Microsoft’s products. So I think Google is killing Microsoft’s growth in the small and medium business sectors. The other part of this equation is the integration and consulting space which is still transitioning to Google Apps